Editorial: A bipartisan shot at Social Security reform?

Wednesday

Is Social Security still the third rail in American politics? Maybe not - though we shall see - judging by some recent comments from Democratic and Republican leaders in the U.S. House.

Is Social Security still the third rail in American politics? Maybe not - though we shall see - judging by some recent comments from Democratic and Republican leaders in the U.S. House.

Indeed, this odd coalition of movers and shakers has indicated a bipartisan willingness to take on one of the federal government's sacred cows with reduced and delayed benefits to ensure that Social Security, at least the way we think of it today, remains viable well into the future. House Majority Leader Steny Hoyer and Minority Leader John Boehner are talking about gradually raising the system's retirement age - currently 67 - up to age 70, likely bumping it up one month per year for folks at least 20 years away from getting their first check. The idea also has gotten some traction with President Obama's deficit reduction commission.

"We need to look at the American people and explain to them that we're broke," Boehner told the Pittsburgh Tribune-Review recently. Social Security is predicted to be paying out more than it's bringing in by 2016 due to the accelerated retirements of baby boomers. Actually, that situation is not unprecented. In fact Social Security is in the red this year thanks to the recession and will spend at least the next two years there. It's anticipated the system will then be locked in a downward spiral over the next two decades before finally running out of reserve funds sometime between 2035 and 2040.

The decision-makers have been aware of those projections for years, of course, with little being done to shore up Social Security thanks to partisan squabbling and a dearth of political will. George W. Bush's 2005 attempt to push private savings accounts died amid heavy opposition. Bill Clinton pledged for eight straight years to reform the entitlement but never got a comprehensive plan put together. The last significant adjustments to the system came during Ronald Reagan's presidency in 1983, after a commission chaired by Alan Greenspan recommended raising the retirement age to its current level. A further increase in that age, combined with some other tweaking, could sustain the program for another 75 years.

Arguably Social Security was never intended to provide checks to retirees for decades on end, as it does today. When it began 75 years ago next month, the average life expectancy for those aged 65 was only two more years, to age 67. Now life expectancy is 82, 16 years beyond the first payment coming in the mail at age 66. Most folks take far more out of the system than they contributed to it.

Now, there also are other reforms the two congressmen have floated that are likely to be controversial, as well. Boehner would tinker with the formula that determines initial benefit levels for retirees, which the National Bureau of Economic Research suggests would trim checks some, with the greatest impact on lower-income workers. He's also open to means testing - limiting Social Security to those who need it, cutting out the well-to-do. Hoyer appears to be on board there, too. Private investment accounts also are back on the table.

From where we sit, all of these ideas deserve rational - as opposed to emotional - discussion and a fair look at the anticipated benefits and drawbacks, with no potential remedies off the table. That would include consideration of increases in the payroll withholding tax, better yet raising the wage base at which higher income Americans stop paying into Social Security - the maximum taxable earnings are $106,800 now - changing the way cost-of-living increases are figured. Get the straight scoop and Americans can go from there. It would be appropriate if the powers-that-be did their part by guaranteeing that the Social Security Trust Fund would no longer be tapped and papered over with IOUs to patch budget shortfalls elsewhere.

No doubt that no small number of Americans would just like to close their eyes and wish this problem goes away, but that's unrealistic. If there were 16 workers for every Social Security recipient in 1950, and a ratio of five to one in 1960, today there are barely more than three, and by 2030 there will be two. The math doesn't work. Some dispute the doomsday scenarios, of course, noting that Social Security actually is in better shape than some other entitlement programs, its demise not exactly imminent, but do nothing and there's a chance Social Security will be but a shell of the retirement program we think of today, or otherwise be dragging the rest of Uncle Sam's empire down, in little more than a generation.

In Washington, of course, it would be charitable to call the odds of doing something slim, especially in an election year. But the mere fact that the conversation is starting at all now is not only remarkable, but reason to believe at least a few important politicians are sobering up to what's coming, with the recognition that the clock is ticking faster than they'd like to acknowledge.

Journal Star of Peoria, Ill.

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